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Reserve for Life-Contingent Contract Benefits and Contractholder Funds (Tables)
 12 Months Ended
Dec. 31, 2014
Reserve for Life-Contingent Contract Benefits and Contractholder Funds  
Reserve for life-contingent contract benefits

 

 

($ in millions)
   2014   2013  

Immediate fixed annuities:

              

Structured settlement annuities

   $ 6,682   $ 6,645  

Other immediate fixed annuities

     2,250     2,283  

Traditional life insurance

     2,521     2,542  

Accident and health insurance

     830     816  

Other

     97     100  
​ ​ ​ ​ ​ ​ ​ ​

Total reserve for life-contingent contract benefits

   $ 12,380   $ 12,386  
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
Key assumptions generally used in calculating the reserve for life-contingent contract benefits

 

 

Product   Mortality   Interest rate   Estimation method

Structured settlement annuities

   U.S. population with projected calendar year improvements; mortality rates adjusted for each impaired life based on reduction in life expectancy   Interest rate assumptions range from 2.7% to 9.0%   Present value of contractually specified future benefits

Other immediate fixed annuities

  

1983 group annuity mortality table with internal modifications; 1983 individual annuity mortality table; Annuity 2000 mortality table with internal modifications; Annuity 2000 mortality table; 1983 individual annuity mortality table with internal modifications

  

Interest rate assumptions range from 0% to 11.5%

  

Present value of expected future benefits based on historical experience

Traditional life insurance

  

Actual company experience plus loading

  

Interest rate assumptions range from 2.5% to 11.3%

  

Net level premium reserve method using the Company's withdrawal experience rates; includes reserves for unpaid claims

Accident and health insurance

  

Actual company experience plus loading

  

Interest rate assumptions range from 3.0% to 7.0%

  

Unearned premium; additional contract reserves for mortality risk and unpaid claims

Other:

  

 

  

 

  

 

Variable annuity
guaranteed minimum
death benefits (1)

   Annuity 2012 mortality table with internal modifications   Interest rate assumptions range from 2.6% to 5.8%   Projected benefit ratio applied to cumulative assessments
(1)
In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc. (collectively "Prudential").
Contractholder funds

 

 

($ in millions)
   2014   2013  

Interest-sensitive life insurance

   $ 7,880   $ 7,777  

Investment contracts:

              

Fixed annuities

     14,310     16,199  

Funding agreements backing medium-term notes

     85     89  

Other investment contracts

     254     239  
​ ​ ​ ​ ​ ​ ​ ​

Total contractholder funds

   $ 22,529   $ 24,304  
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
Key contract provisions relating to contractholder funds

 

 

Product   Interest rate   Withdrawal/surrender charges

Interest-sensitive life insurance

   Interest rates credited range from 0% to 9.0% for equity-indexed life (whose returns are indexed to the S&P 500) and 1.0% to 6.0% for all other products   Either a percentage of account balance or dollar amount grading off generally over 20 years

Fixed annuities

  

Interest rates credited range from 0% to 9.8% for immediate annuities; (8.0)% to 13.5% for equity-indexed annuities (whose returns are indexed to the S&P 500); and 0.1% to 6.0% for all other products

  

Either a declining or a level percentage charge generally over ten years or less. Additionally, approximately 21.5% of fixed annuities are subject to market value adjustment for discretionary withdrawals

Funding agreements backing medium-term notes

  

Interest rate credited is 2.49%

  

Not applicable

Other investment contracts:

  

 

  

 

Guaranteed minimum income, accumulation and withdrawal benefits on variable (1) and fixed annuities and secondary guarantees on interest-sensitive life insurance and fixed annuities

   Interest rates used in establishing reserves range from 1.7% to 10.3%   Withdrawal and surrender charges are based on the terms of the related interest-sensitive life insurance or fixed annuity contract
(1)
In 2006, the Company disposed of substantially all of its variable annuity business through reinsurance agreements with Prudential.
Contractholder funds activity

 

 

($ in millions)
   2014   2013   2012  

Balance, beginning of year

   $ 24,304   $ 39,319   $ 42,332  

Classified as held for sale, beginning balance

     10,945     —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total, including those classified as held for sale

     35,249     39,319     42,332  

Deposits

     1,333     2,440     2,275  

Interest credited

     919     1,295     1,323  

Benefits

     (1,197 )   (1,535 )   (1,463 )

Surrenders and partial withdrawals

     (2,273 )   (3,299 )   (3,990 )

Maturities of and interest payments on institutional products

     (2 )   (1,799 )   (138 )

Contract charges

     (881 )   (1,112 )   (1,066 )

Net transfers from separate accounts

     7     12     11  

Other adjustments

     36     (72 )   35  

Sold in LBL disposition

     (10,662 )   —     —  

Classified as held for sale, ending balance

     —     (10,945 )   —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Balance, end of year

   $ 22,529   $ 24,304   $ 39,319  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Variable annuity contracts with guarantees

 

 

($ in millions)
   December 31,  
 
   2014   2013  

In the event of death

              

Separate account value

   $ 4,288   $ 5,951  

Net amount at risk (1)

   $ 581   $ 636  

Average attained age of contractholders

     69 years     68 years  

At annuitization (includes income benefit guarantees)

              

Separate account value

   $ 1,142   $ 1,463  

Net amount at risk (2)

   $ 238   $ 252  

Weighted average waiting period until annuitization options available          

     None     None  

For cumulative periodic withdrawals

              

Separate account value

   $ 382   $ 488  

Net amount at risk (3)

   $ 8   $ 9  

Accumulation at specified dates

              

Separate account value

   $ 480   $ 732  

Net amount at risk (4)

   $ 24   $ 27  

Weighted average waiting period until guarantee date          

     4 years     5 years  
(1)
Defined as the estimated current guaranteed minimum death benefit in excess of the current account balance as of the balance sheet date.
(2)
Defined as the estimated present value of the guaranteed minimum annuity payments in excess of the current account balance.
(3)
Defined as the estimated current guaranteed minimum withdrawal balance (initial deposit) in excess of the current account balance as of the balance sheet date.
(4)
Defined as the estimated present value of the guaranteed minimum accumulation balance in excess of the current account balance.
Liabilities for guarantees

 

 

($ in millions)





 
   Liability for
guarantees
related to
death benefits
and interest-
sensitive life
products		   Liability for
guarantees
related to
income
benefits		   Liability for
guarantees
related to
accumulation
and withdrawal
benefits		   Total  

Balance, December 31, 2013 (1)

   $ 377   $ 113   $ 65   $ 555  

Less reinsurance recoverables

     100     99     56     255  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net balance as of December 31, 2013

     277     14     9     300  

Incurred guarantee benefits

     34     —     9     43  

Paid guarantee benefits

     —     —     —     —  

Sold in LBL disposition

     (214 )   (10 )   (3 )   (227 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net change

     (180 )   (10 )   6     (184 )

Net balance as of December 31, 2014

     97     4     15     116  

Plus reinsurance recoverables

     98     91     45     234  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Balance, December 31, 2014 (2)

   $ 195   $ 95   $ 60   $ 350  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Balance, December 31, 2012 (3)

   $ 309   $ 235   $ 129   $ 673  

Less reinsurance recoverables

     113     220     125     458  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net balance as of December 31, 2012

     196     15     4     215  

Incurred guarantee benefits

     83     (1 )   5     87  

Paid guarantee benefits

     (2 )   —     —     (2 )
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net change

     81     (1 )   5     85  

Net balance as of December 31, 2013

     277     14     9     300  

Plus reinsurance recoverables

     100     99     56     255  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Balance, December 31, 2013 (1)

   $ 377   $ 113   $ 65   $ 555  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
(1)
Included in the total liability balance as of December 31, 2013 are reserves for variable annuity death benefits of $98 million, variable annuity income benefits of $99 million, variable annuity accumulation benefits of $43 million, variable annuity withdrawal benefits of $13 million and other guarantees of $302 million.
(2)
Included in the total liability balance as of December 31, 2014 are reserves for variable annuity death benefits of $96 million, variable annuity income benefits of $92 million, variable annuity accumulation benefits of $32 million, variable annuity withdrawal benefits of $13 million and other guarantees of $117 million.
(3)
Included in the total liability balance as of December 31, 2012 are reserves for variable annuity death benefits of $112 million, variable annuity income benefits of $221 million, variable annuity accumulation benefits of $86 million, variable annuity withdrawal benefits of $39 million and other guarantees of $215 million.